alter – information systems 4th ed. © 2002 prentice hall 1 understanding systems from a business...

1 Alter – Information Systems 4th

ed. © 2002 Prentice Hall

Understanding Systems From a Business Viewpoint

Alter – Information Systems 4th ed. © 2002 Prentice Hall2

Opening Case - Amazon How does Amazon.com provide value for

customers?


Opening Case - Amazon

At the beginning: Large discounts Focus on customer’s online shopping

experience: easy search, varied information about books, customer profiles, etc.

Very little inventory


An evolving business model: Large warehouses Branched into selling other types of products

Service perceived as very reliable Not profitable!


Amazon.com

The point of this case is not about technology essentially, rather it is about how information systems and information technology can transform business operations.

How does Amazon.com provide value for its customers?

What has “transformed” in this business? How has competitive advantage changed to

competitive necessity?


The Work System Framework A useful way of thinking about information systems

and their relationship to customers and participants from the perspective of a business professional.

A work system is a system that produces products for internal and external customers through a business process performed by human participants with the help of information technology.

An information system is a particular type of work system that uses information technology to capture transmit store, retrieve, manipulate, or display information, thereby supporting one or more other work systems.


The Work System Framework


Amazon.Com - WCA

CUSTOMER

Person who purchases books

Wholesalers that supply the books

Amazon.com’s shipping department

PRODUCT

Information about books that might be purchased

Information describing each book order

Books that are eventually delivered


Amazon.Com - WCABUSINESS PROCESS

Major Steps:

•Purchaser logs on to www.amazon.com

•Purchaser identifies desired book or gives search criteria

•Purchaser looks at book-related information and decides what to order

•Purchaser enters order

•Amazon.com orders book from wholesaler

•Wholesaler sends book to Amazon.com

•Shipping department packages order and sends it to the purchaser

Rationale:

Instead of forcing book buyers to go to typical bookstores, permit them to use

online access from home or from work.


Amazon.Com - WCA

PARTICIPANTS

People interested inpurchasing books

Order fulfillment department of wholesaler

Shipping department of Amazon.com

INFORMATION

Orders for books

Price and other information about each book

Purchase history andRelated information forEach customer

TECHNOLOGY

Personal computer used bypurchaser

Computers and networks usedby Amazon.com for order Processing

The Internet (Infrastructure)


Debate Topic:

Is there any reason to believe that purely on-line retailers such as Amazon.com have major long-term advantages over retailers such as Barnes and Noble that have both physical stores and e-commerce sites?


The Need for Frameworks and Models

Framework = a brief set of ideas & assumptions for thinking about a particular issue

Model = a useful representation of some aspect of reality Typically based on a frameworks Emphasize some features of reality, while

ignoring others


A Classification of Models

Iconic Models Analog Models Mathematical Models Mental Models


Iconic and Analog Models

Iconic (scale) models - the least abstract model, is a physical replica of a system, usually based on a different scale from the original. Iconic models can scale in two or three dimensions.

Analog Models - Does not look like the real system, but behaves like it. Usually two-dimensional charts or diagrams. Examples: organizational charts depict structure, authority, and responsibility relationships; maps where different colors represent water or mountains; stock market charts; blueprints of a machine; speedometer; thermometer


Mathematical Models

Mathematical (quantitative) models - the complexity of relationships sometimes can not be represented iconically or analogically, or such representations may be cumbersome or time consuming.A more abstract model is built with mathematics.

Note: recent advances in computer graphics use iconic and analog models to complement mathematical modeling.

Visual simulation combines the three types of models.


Mental Models

People often use a behavioral mental model. A mental model is an unworded description of how

people think about a situation. The model can use the beliefs, assumptions,

relationships, and flows of work as perceived by an individual.

Mental models are a conceptual, internal representation, used to generate descriptions of problem structure, and make future predications of future related variables.

Support for mental models are an important aspect of Executive Information Systems. We will discuss this in depth later.


Examples of Models

Alter – Information Systems 4th

ed. © 2002 Prentice Hall18



Elements of the Work System Framework: The internal or external customers of the business process The products or services generated by the work system. The steps in the business process. The participants in the business process. The information the business process uses or creates. The technology the business process uses. Context = organizational, competitive, technical, and

regulatory realm within which work system operates. Infrastructure = shared human or technical resourcs the

work system relies on (even those those resources may be managed outside the work system).


The system actually performing the work Business process Participants Information Technology

Outputs: Products & services used by the customers

External factors Infrastructure Context


The business process is at the core of the work system The same process can be performed with

drastically different results depending on Who does the work What information & technology is being used


Balance Between the Elements of a Work System

The work system elements must be in balance

A change in one element usually requires a change in other elements Well-intended changes may also have

negative impacts


Viewing Information Systems and Projects As Work Systems

Information systemInformation system = a work system devoted to capturing, transmitting, storing, retrieving, manipulating, and displaying information Software products (e.g. Oracle, Excel) are

NOT information systems ProjectProject = a work system that is designed

to produce a particular product and then go out of existence


Work System Principles


Work Systems Principles

Please the customers (customers, products & services)

Perform the work efficiently (business processes) Serve the participants Create Value from information Minimize effort consumed by technology Deploy infrastructure as a genuine resource Minimize unintended impacts and conflicts

(context)


Information System vs. Work Systems

Bar code scanners and computers identify the items sold and calculate the bill

Work system supported by the information system: Performing customer checkout

Aspects of the work system not included in the information system: Establishing personal contact with customers, putting the groceries in bags

University registration system permits students to sign up for specific class sections

Work system supported by the information system: Registering for classes

Aspects of the work system not included in the information system: Deciding which classes to take and which sections to sign up for in order to have a good weekly schedule

Word Processing system used for typing and revising chapters

Work system supported by the information system: Writing a book

Aspects of the work system not included in the information system: Deciding what to say in the book and how to say it


Information System vs. Work SystemsInteractive system top managers use to monitor their organization’s performance

Work system supported by the information system: Keeping track of organizational performance

Aspects of the work system not included in the information system: Talking to people to understand their views about what is happening

System that identifies people by scanning and analyzing voice prints

Work system supported by the information system: Preventing unauthorized access to restricted areas

Aspects of the work system not included in the information system: Human guards, cameras, and other security measures


Relationships Between Work Systems and Information Systems


Reality Check:

Identify some situations in which you have encountered information systems that support other work systems. Describe the areas of overlap and non-overlap between information systems and the work system.


Need for a Balanced View of a System – Figure 2.5


Need for a Balanced View of a System Focus on Business Results – Emphasize the

customer’s satisfaction with whatever is being produced along with concern for the efficiency of the business process.

Focus on People and Organization – Emphasize the work environment, job satisfaction, and whether the organization is operating smoothly.

Focus on technology and organization – Emphasize the processing of information in databases, transmission of information, and whether the technology is operating efficiently and effectively.


Each of the three viewpoints is essential, but an excessive emphasis on any of them may lead to problems

The importance of the ongoing collaboration between business and IT professionals.

IT professionals may tend to look at the third viewpoint. It is important that business professionals make sure the first two perspectives are not lost.


Caution: Excessive Emphasis On…

Business Results can lead to superficial analysis of organizational and technical capabilities and wishful thinking of the power of technology.

People and Organization can generate too much concern on how people are getting along and not enough on business results and whether technology and information are adequate.

Technology and Information can sometimes generate technology solutions to minor problems and have little impact on business results or internal operations.



The Principle-based Systems Analysis Method

One of the possible ways to analyze a work system


The General Idea of Systems Analysis – Figure 2.6

Can be applied to the system as a whole and to its subsystems

Iterative processIterative process Shortcoming: no guidelines as to what has to be done at

each step


Organizing the Analysis Around the Work System Principles

The principle-based systems analysis TM

(PBSA) A practical approachpractical approach for analyzing systems

at various levels of detail Combines the general system analysis

concepts with the work system framework Converts the four steps of system analysis

into three steps


Defining the Problem & the Work System

The scope of the work system is not fixed Tradeoff between a too broad or too narrow a

scope Work system snapshot – a tabular summary

of the main aspects of the work system


Identify constraints and priorities Constraints Constraints = limitations that render certain

options unfeasible Ex.: budgetary limits. Existing technology

standards, etc. PrioritiesPriorities = statements about the relative

importance of various goals A small number of high priority issues should

remain the primary focus


Explore the Situation & Search for Possible Improvements

Each principle is used in turn to focus on a different part of the work system

Problems that were not included in the original problem definition may be uncovered

Some potentially beneficial changes may negatively impact other parts of the system


Address the Problem While Supporting the Existing Priorities

The recommendation: “What Should you do?” Clearly stated decision criteria to resolve the

tradeoffs and uncertainties related to constraints, priorities, and implementation capabilities

Tradeoffs: conflicting needs of work systems, performance vs. price, technical purity vs. business requirements, etc.

Uncertainties: direction of future technology, what is best for the company, etc.


Complete recommendations may include: Recommended changes in work systems elements. Clarification of work system vs. information systems

changes. Explanation of how proposed improvements will

address important parts of the problem. Justification in terms of organizational priorities and

feasibility Identification of meaningful alternatives Timelines and required resources Tentative project plan and deliverables


Applying PBSA to Work Systems, Information Systems, and Projects – Figure 2.7


Limitations & Pitfalls of PBSA

Compromise between complexity and completeness

Works well when the business process consists of identifiable steps that produce a recognizable output

Does not work so well when applied to activities such as “management” or “communication”


Common Systems Analysis Pitfalls Related to Elements of the Work System Framework


Common Pitfalls – Work System Elements

Customer ignore customer and the fact that the customer should evaluate

the product. Treating managers as customers even though they don’t use the

product directly. Product

forget that the purpose is to produce a product or service for a customer.

Forget that the product of a work system is often not the product of the organization.


Common Pitfalls…

Business Process Define process so narrowly that improvement is of little

consequence. Define process to widely that it is too complex. Confuse business process measures(consistency and

productivity) with product measures (cost to the customer and quality perceived by customer).

Think of business process as theory and ignore its support by participants, information, and technology

Participants ignore incentives and other pressures focus on users rather than participants.


Common Pitfalls…

Information assume better information generates better results. Ignoring the importance of “soft” information not captured by

formal systems.

Technology Believing that the technology is the system. assume better technology generates better results. Focus on the technology without thinking about whether it

makes a difference in the work system.


Common Pitfalls…

Context Ignoring context issue such as organizational culture and

politics, organizational policies, the competitive environment, and government and industry standards and regulations.

Ignoring non-participant stakeholders.

Infrastructure Ignoring possible failures in technical infrastructure (what

happens when the Internet is down?) Ignoring the need for human infrastructure to keep the work

system in operation (Who does on-going training of new staff).



Measuring Work System Performance


System architecture = the system’s main components, how they are linked, and how they operate together

System performance = how well the system, its components, and its products operate


Typical Performance Variables•Customer satisfaction

•Cost•Quality•Responsiveness•Reliability•Conformance to standards and regulations

•Activity Rate•Output rate•Consistency•Productivity

•Cycle Time•Down time•Security

•Skills•Involvement•Commitment•Job satisfaction

•Quality•Accessibility•Presentation•Security

•Functional Capabilities•Ease of Use•Cost of Ownership•Compatibility•Maintainability


Some important issues to keep in mind: Separately evaluate the performance of

different elements, because improvements in one area may not be beneficial in others

More is not always betterMore is not always better For some performance variables (e.g., customer

satisfaction) more isis better For others, such as consistency, rapid delivery,

etc., more is often notis often not better


Efficiency vs. effectiveness EFFICIENCY involves doing things the right way

An internal view Focus on how well resources are being used to

produce the outputs Ex.: productivity, cycle time, etc.

EFFECTIVENESS involves doing the right things An external view Focus on improving customer satisfaction Ex.: cost, quality, responsiveness, etc.


Performance Variables

Performance variables can be described or measured at different levels of clarity.

Quality experts are adamant that careful performance measurement is essential for process improvement.

Note differences between vague description and measurements.


Comparing Vague Descriptions, Measurements, and Interpretations

ACCURACY OF INFORMATIONVague description: The information doesn’t seem very accurate.Measurement: 97.5% of the readings are correct within 5%.Interpretation:This is (or is not) accurate enough, given the way the information will be used.

SKILLS OF PARTICIPATIONVague description: The sales people are very experienced.Measurement: Every salesperson has 5 or more years of experience; 60% have more than 10 years.Interpretation:This system is (or is not) appropriate for such experienced people.

CYCLE TIME OF BUSINESS PROCESSVague description: This business process seems to take a long time.Measurement: The three major steps take an average of 1.3 days each, but the waiting time between the steps is around 5 days.Interpretation:This is (or is not) better than the average for this industry, but we can (or cannot) improve by eliminating some of the waiting time.

QUALITY OF THE WORK SYSTEM OUPUTVague description: We produce top quality frozen food, but our customer’s aren’t enthusiastic.Measurement:65% of our customers rate it average or good even though our factory defect rate is only.003%Interpretation: Our manufacturing process does (or doesn’t) seem O.K., but we do (or don’t) need to improve customer satisfaction.


Important Point Improvements in a work system can often be

found by looking at relationships between architecture and performance issues.

Customer satisfaction is largely determined by product performance (effectiveness).

Product performance is often determined by a combination of product architecture and the internal work system performance(efficiency).

Note: efficiency vs. effectiveness


From work system architecture to customer satisfaction



Clarifications Related to the Elements of a Work System


Internal vs. External Customers

External customers - individuals or representatives of other firms or government organizations The reason the firm exists

Internal customers – work for the firm & participate in other work system Also important for the firm as a whole


Multiple Customers With Different Concerns – Figure 2.8


Transforming Customers Into Participants

Self-service work systems Ex.: ATMs, Web sites, etc.

May be beneficial to both firm and customers Cost reductions Better feedback, etc.


Products & Services

Customers evaluate the product Several areas of of product performance,

such as: Cost Perceived quality Reliability, etc.

Separate consideration of each factor helps in devising new ways to improve customer satisfaction


Participants

The people that perform the work process Difference between work system

participants and IT users Focus on work-related aspects as opposed to

the information system itself


Data, Information, Knowledge – Figure 2.10 DataData – facts, images, or sounds that may or may not be

pertinent or useful for a particular task Information Information – data whose form or content are appropriate for a

particular use KnowledgeKnowledge – instincts, ideas, rules, and procedure that guide

actions and decisions


Hard and Soft Data

Hard dataHard data = clearly defined data generated by formal systems

Soft dataSoft data = intuitive or subjective information obtained by informal means Often essential for understanding what really

happened, or whether proposed actions might encounter resistance


Technology

INFORMATION TECHNOLOGY = computer and communication hardware and software

IT has no impact unless it is used within a business process


Infrastructure

The shared human, informational, and technical resources on which a work system relies in order to operate These resources exist and are managed

outside the work system Ex.: a shared corporate database, a computer

network, a support & training organization The infrastructure should be operated

and managed like any other work system


Technology vs. Infrastructure

Guidelines: Infrastructure if:Infrastructure if:

It is shared between many work systems It is owned/managed by a centralized authority Details are generally hidden from users

Not included in the infrastructure if:Not included in the infrastructure if: Owned & controlled within the work system Its hands-on users need to understand the

technical details


Human Infrastructure

Often less noticed than the hardware & software components, but equally important

Responsibilities include: Managing the IT facilities Training Enforcing standards, etc.


Information Infrastructure

Codified information that is shared across the company

This type of high level of information sharing is still rare


Context

The organizational, competitive, technical, and regulatory environment within which the work system operates

Includes: External stakeholders Organizational policies, practices, and culture Business pressures, etc.

May create both incentives and obstacles



Another Way to Look at This – From Alter’s 3rd Edition -

Five Perspectives for Looking at a Work System


WCA framework for thinking about any system in business


Five Perspectives for Understanding a Work System

ARCHITECTURE•What are the components of the system that performs the work and who uses the work product?•How are the components linked?•How do the components operate together?

PERFORMANCE•How well do the components operate individually?•How well does the system operate? (How well is the work performed?)•How well should the system operate?

INFRASTRUCTURE•What technical and human infrastructure does the work rely on? •In what ways does infrastructure present opportunities or obstacles?

CONTEXT•What are the impacts of the organizational and technical context?•In what ways does the context present opportunities or obstacles?

RISKS•What foreseeable things can prevent the work from happening, can make the work inefficient, or can cause defects in the work product?•What are the likely responses to these problems?


Important Point Improvements in a work system are usually

related to the links between the architecture and the performance perspectives.

Customer satisfaction is largely determined by product performance.

Product performance is determined by a combination of product architecture and the internal work system performance.

Note: efficiency vs. effectiveness


From work system architecture to customer satisfaction


Detailed Discussion of the Five Perspectives: Architecture Performance Infrastructure Context Risks


Architecture, Perspective #1

Architecture is a summary of how a work system operates. It focuses on the components of the system and how those components are linked, and how they operate together to produce outputs.

It is not merely a technical issue; IT and business professional involved with a system need to understand how it operates.

It is impossible to build an information system without detailed documentation of information and technology components of the architecture.

We use successive decomposition for documenting and summarizing architecture.

Process operation and process characteristics


Architecture, Perspective #1CUSTOMER

Customer’s entire cycle of involvement with the product

Requirements

Acquisition

Use

Maintenance

Retirement

PRODUCT

Components

Information content

Physical Content

Service content

(more in Chapter 6)


Architecture, Perspective #1BUSINESS PROCESS

Process operation:

•Processes providing inputs

•Sequence and scheduling of major steps

•Processes receiving the outputs

Process characteristics:

•Degree of structure

•Range of involvement

•Level of integration

•Complexity

•Degree of reliance on machines

•Linkage of planning, execution, and control

•Attention to exceptions, errors, and malfunctions

More to be covered in Chapter 3….



PARTICIPANTS

Formal and informal organization:

Job responsibility

Organization chart

INFORMATION

Major data files in the database:

Data organization and access

TECHNOLOGY

Major components:

Hardware

Software


Performance, Perspective #2

Performance - How well the system operates. A complete analysis involves qualitative and quantitative

measurements. Consider some performance variables….



CUSTOMER

Customer Satisfaction

PRODUCT

Cost

Quality

Responsiveness

Reliability

Conformance to standards and regulations



BUSINESS PROCESS

Rate of output

Consistency

Productivity

Cycle time

Flexibility

Security



PARTICIPANTS

Skills

Involvement

Commitment

Job satisfaction

INFORMATION

Quality

Accessibility

Presentation

Prevention of unauthorized access

TECHNOLOGY

Functional capabilities

Ease of use

Compatibility

Maintainability


Comparing Vague Descriptions, Measurements, and Interpretations

ACCURACY OF INFORMATIONVague description: The information doesn’t seem very accurate.Measurement: 97.5% of the readings are correct within 5%.Interpretation:This is (or is not) accurate enough, given the way the information will be used.

SKILLS OF PARTICIPATIONVague description: The sales people are very experienced.Measurement: Every salesperson has 5 or more years of experience; 60% have more than 10 years.Interpretation:This system is (or is not) appropriate for such experienced people.

CYCLE TIME OF BUSINESS PROCESSVague description: This business process seems to take a long time.Measurement: The three major steps take an average of 1.3 days each, but the waiting time between the steps is around 5 days.Interpretation:This is (or is not) better than the average for this industry, but we can (or cannot) improve by eliminating some of the waiting time.

QUALITY OF THE WORK SYSTEM OUPUTVague description: We produce top quality frozen food, but our customer’s aren’t enthusiastic.Measurement:65% of our customers rate it average or good even though our factory defect rate is only.003%Interpretation: Our manufacturing process does (or doesn’t) seem O.K., but we do (or don’t) need to improve customer satisfaction.


Infrastructure, Perspective #3

Infrastructure: Essential Resources shared with other systems.

Infrastructure failures may partially be beyond the control of people who rely on it (e.g. power outages).

Evaluation is difficult because the same infrastructure may support some applications excessively and others insufficiently.

Critical mass, having enough users to attain desired benefits, may be a key infrastructure issue.

Distinguish between infrastructure and the supporting technology (laptops used in the sales process vs. used for company e-mail).



Technology can be infrastructure if it is outside the work system, shared between work systems, owned and managed by a central authority, or when details are largely hidden from users.

Business professionals are often surprised at the amount of effort and expense absorbed by human infrastructure.


Infrastructure, Perspective #3CUSTOMER

Technical and human infrastructure the customer must have to use the product

PRODUCT

Infrastructure related to information content

Infrastructure related to physical content

Infrastructure related to service content


Infrastructure, Perspective #3BUSINESS PROCESS

Infrastructure related to internal operation of the process

Infrastructure related to inputs from other processes

Infrastructure related to transferring the product to other processes



PARTICIPANTS

Shared

human infrastructure

INFORMATION

Shared

information infrastructure

TECHNOLOGY

Shared

technology infrastructure


Context, Perspective #4.

The organizational, competitive, and regulatory environment surrounding the system.

The environment around the system may create incentives and even urgency for change.

The personal, organizational, and economic parts of the context have direct impact through resource availability.

Even with enough monetary resources, context factors ranging from historical precedents and budget cycles to internal politics can be stumbling blocks.

Incentives Organizational Culture Stakeholders


Context, Perspective #4


Context, Perspective #4CUSTOMER

Issues in the customer’s environment that may affect satisfaction or use

Business and competitive climate

PRODUCT

Substitute products

Ways the customer might bypass this type of product altogether



BUSINESS PROCESS

Organizational culture

Concerns of stakeholders

Organizational policies and initiatives

Government regulations and industry standards



PARTICIPANTS

Incentives

Other responsibilities and job pressures

INFORMATION

Policies and practices regarding information sharing, privacy, etc.

TECHNOLOGY

Technology policies and practices

Technology that may become available soon


Risk, Perspective #5

Risks: Foreseeable Things that can go wrong in terms of: accidents and malfunctions computer crime project failure

(To be considered again in Chapter 13….)


Risk, Perspective #5CUSTOMER

Customer dissatisfaction

Interference by other stakeholders

PRODUCT

Inadequate or unreliable products

Fraudulent products


Risk, Perspective #5BUSINESS PROCESS

Operator error

Sloppy procedures

Inadequate backup and recovery

Mismatch between process requirements and participant’s abilities

Unauthorized access to computers, programs, data



PARTICIPANTS

Crime by insiders or outsiders

Inattention by participants

Failure to follow procedures

Inadequate training

INFORMATION

Data errors

Fraudulent data

Data theft

TECHNOLOGY

Equipment failure

Software bugs

Inadequate performance

Inability to build common sense into information systems


Work Systems Principles

Please the customers (customers, products & services)

Perform the work efficiently (business processes) Serve the participants Create Value from information Minimize effort consumed by technology Deploy infrastructure as a genuine resource Minimize unintended impacts and conflicts

(context)

alter – information systems 4th ed. © 2002 prentice hall 1 understanding systems from a business...

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